1. Technical Field
The present invention relates generally to accounting systems, and more specifically relates to a system and method for performing on demand accrual in an enterprise resource planning (ERP) system.
2. Related Art
Enterprise resource planning (ERP) systems, such as that sold by SAP™, allow many different facets of a business to be managed and integrated together with a comprehensive computing solution. Thus, ERP systems allow information to be processed and shared by and among different parts of the business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, tracking orders, accounting, finance, etc.
As businesses become more complex and competitive, the ability to provide “on-demand” information, i.e., a current snapshot of a business metric, remains an important challenge. One area where this challenge exists involves providing a daily gross profit analysis from an ERP system. In order to determine gross profit, revenue and cost data must be extracted for the ERP system. However, for any given accounting period, a significant portion of the revenue and cost must be “accrued.” Accrued revenue and cost is that portion of the total revenue and cost that cannot be recognized from an accounting perspective as “real revenue” or “real cost” because, e.g., the customer has not yet been billed.
Reasons for accruing revenue and cost generally fall into, but are not limited to, three categories: (1) Partial Deliveries: ordered items that have been partially delivered but remain unbilled; (2) Shipped But Unbilled Activities (SBU): ordered items that have been shipped, but not yet billed; and (3) Billed Not Accounted Activities: ordered items that have been billed to the client, but not yet posted to accounting due to some application error.
Standard accounting practices require accrued revenue and cost to be posted on the last day of the month and reversed at the first day of the following month when the new period is opened. This methodology allows the real revenue to be posted when the customer is billed. Unfortunately, this existing methodology does not allow a daily gross profit analysis to be generated. Accordingly, a need exists for a system and method that will allow on demand accrual calculations.